Campaign for Vermont blasts growth in government spending as “unsustainable”

Tom Pelham. Photo by Nat Rudarakanchana

Tom Pelham. Photo by Nat Rudarakanchana

Campaign for Vermont, a 501(c)4 “nonpartisan” advocacy group, is criticizing state government spending trends as “unsustainable” over the long term, calling for a renewed political focus on fiscal stability.

In a 30-page report analyzing state budget trends from 2008 to 2012, the group highlights a $908.7 million or 22 percent increase in the state budget compared to 2008 levels.

The report targets the Agency of Human Services. Tom Pelham, a group co-founder and former state tax commissioner, told reporters at a Montpelier press conference that despite a 29 percent increase in human services spending since 2008, life for poorer Vermonters hasn’t significantly improved. Pelham presented charts and statistics which he said showed a widespread political failure to carefully control spending or reform state services for efficiency.

“It’s very clear, I think, to most observers that we do have a structural imbalance in our state budget, between what is going on in spending and what is going on in the underlying economy and the demographics in Vermont,” Pelham said.

Increases of more than 10 percent in state spending, in sectors like education, health care and human services, are disproportionate, Pelham said, compared with small percentage increases in population and median household income.

“We basically have double digit spending growth and an underlying economy over a five-year period that is growing in the low single digits at best,” he said.

Pelham argued that the state’s stagnant economy didn’t justify those spending increases. “If we stay on this course, this unsustainable course, we will be in trouble,” he said.

Doug Racine, secretary of the Agency of Human Services, said the economy the Shumlin administration inherited had been influenced partly by Pelham, who served in the Douglas administration as a “key player,” from 2008 to 2010.

“When the Shumlin administration came in, we found a lot of problems, and thought that Vermonters were not getting the same quality of services they were getting previously,” Racine said.

Racine cited improvements to the Adult Protective Services division, oversight of contracting, and the mental health system, as ways his agency had improved the lives of Vermonters.

“Perhaps it’s a fair criticism to say that over those five years, Vermonters weren’t doing better,” said Racine. “But I’d say there was a downward trajectory when Gov. Shumlin came into office, and an upward trajectory now.”

Racine said declining federal revenues and increasing caseloads together accounted for the rise in human services spending. In a struggling economy, he said, residents tend to rely more on state services.

“That’s the conundrum we face in human services,” said Racine. “Generally, when the [state] revenues are the lowest, the needs are the highest. … The need is great out there. Middle class folks are struggling with costs of health care, housing, fuel, and all of that, so we’re seeing increased demands to help people struggle with the necessities of life.”

“We took $8 million from a reserve, in the winter, and put it into fuel assistance, so that people can get the fuel they need so they don’t freeze in the winter,” he said. “That’s some increased spending.”

Pelham said Govs. Richard Snelling, Howard Dean and Jim Douglas all kept spending increases at a sustainable level, but he fell short of criticizing Gov. Peter Shumlin for being fiscally irresponsible.

Responsibility for increased spending and little reform rests with lawmakers from both parties in recent years, he said, who failed to make tough spending cuts. Pelham says generous federal stimulus funds totaling more than $920 million from 2009 to 2012 made the Legislature complacent.

Significant human services cuts are widely expected to be unveiled in the governor’s budget later this week. Despite pointing out the 29 percent AHS budget increase as a cause for concern, Pelham said he wouldn’t necessarily back cuts to AHS.

Pelham says he prefers saving money through efficiency reforms, but cuts must remain an option.

Campaign for Vermont wants Shumlin to limit this year’s spending increase in the budget to inflation plus population growth, or about 2.55 percent. The group also urges the governor to improve the state’s benefits management system and to end cost shifting.

Link to the Campaign for Vermont budget white paper.


Nat Rudarakanchana

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21 Comments on "Campaign for Vermont blasts growth in government spending as “unsustainable”"

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rosemarie jackowski
3 years 10 months ago

Question…what percent of the 29% went to the people who need it – and how much went to administrative costs.

It is very clear that the quality of life for many Vermonters has decreased. Everything has gotten harder for many families and the elderly. Health care, transportation, even dental care is now considered an unattainable luxury. Meanwhile the school tax is going up 19%. Now some will lose their houses.

John Greenberg
3 years 10 months ago

2008. Hmm. Rings a bell. Oh yeah, Wall Street Crash followed by “The Great Recession.”

There wouldn’t be any relationship between the worst recession in more than half a century causing massive unemployment and an increase in human services spending, would there? Nah.

Lance Hagen
3 years 10 months ago

John, before you ‘blow it off’ and blame it all on the ‘The Great Recession’, keep in mind that from FY’01 to FY’11 the AHS budget grew by 216% (~$1B in FY’01 to ~$3B in FY’11).

Add to that, since 1991 Vermont’s enrollment in Medicaid has increased by 115% as of 2009 (compared to the US at 67%) and now has earned the second highest enrollment in Medicaid (only Washington DC beats them)

So discounting Vermont’s increasing dependency on government services as part of ‘The Great Recession’ is incorrect. It has been going on for a long time.

Jason Farrell
3 years 10 months ago
“Pelham said Govs. Richard Snelling, Howard Dean and Jim Douglas all kept spending increases at a sustainable level, but he fell short of criticizing Gov. Peter Shumlin for being fiscally irresponsible.” “Pelham said he wouldn’t necessarily back cuts to AHS.” “Pelham says he prefers saving money through efficiency reforms, but cuts must remain an option.” Now there are some awesome examples of this group’s “nonpartisan” advocacy. Way to go out on a limb and take every position possible in the argument, Mr. Pelham. While I sincerely appreciate Mr. Pelham’s commitment to public service in the state of Vermont, I believe… Read more »
kevin ellis
3 years 10 months ago

Greenberg is right. And to blame implicitly the current legislature for this spending is ridiculous. The current Speaker is hardly a runaway spender. Likewise, the governor, who is cheaper than the Speaker in his spending practices and unwillingness to raise taxes. Tom’s beef should be with the forces unleashed during the Bush years via unfunded wars and tax cuts and unrestrained Wall Street chicanery. The legislature and the governor do what they must to protect people and keep society moving ahead. To try and tag them as spenders will never sell.

Tom Pelham
3 years 10 months ago
Kevin…given your standing as an inside the Montpelier beltway lobbyist, I can understand your solicitousness of the Speaker, the Governor and the other powers that be under the Golden Dome. But I hope, for your clients’ sake, that behind closed doors you offer them a more thoughtful and realistic profile of what’s going on in Montpelier other than the lame bromide of it’s the “Bush years”. All the data in our report came from sources routinely used by state leaders, including the JFO, the state Department of Labor, the new Department of Financial Regulation, the Consensus Forecast of the JFO… Read more »
Lance Hagen
3 years 10 months ago

All the commentators here want to play the ‘blame game’ ….. being it Dean, Douglas, Shumlin, the legislature, Bush, Wall Street, wars and list goes on.

But no one can deny that the populace of Vermont has become very dependent on government services at a rate that is higher than the rest of the country

Lee Russ
3 years 10 months ago

I’d love to see the data on that claim.

One thing that comes immediately to mind is that many states, especially in the south, simply do not provide much help for their poor and starving citizens. When that policy gets translated to financial statistics, I’ll bet it means that these states are considered to have nobly prevented their populace from becoming very dependent on government services.

As I said, I’d love to see your data.

Lance Hagen
3 years 10 months ago

Lee, you want data sources. Here you go

For Medicaid enrollment:

http://www.medicaid.gov/Medicaid-CHIP-Program-Information/By-Topics/Data-and-Systems/Downloads/2011-Medicaid-MC-Enrollment-Report.pdf

http://www.statehealthfacts.org/comparetable.jsp?ind=199&cat=4&sub=52&yr=92&typ=2&sort=a

The must have updated the data on Medicaid enrollment since I last pulled the data. Vermont is still #2 on the list at 29% of the total population (was 23.3% when I last looked), but Washington DC has been replaced by California at 30%). Note that our neighbors to the east, NH, is at 12%

For the state spending on AHS (or any other areas of state spending) you will need to wade through archives in the ‘Joint Fiscal Office’
http://www.leg.state.vt.us/jfo/appropriations.aspx

Jane Stein
3 years 10 months ago

Making health care available to poor people is baaadd juju why?

Craig Powers
3 years 10 months ago

It is not a bad thing Jane…it is just the constant lies from Montpelier that our premiums will be lower, etc. Kind of like Obama saying Obamacare would cut premiums by $2500 when in fact they are much higher and the taxes are steeper!

Lee Russ
3 years 10 months ago
The first link r.e. Medicaid is irrelevant. The second link does show that VT is second in terms of percentage of its population that receives Medicaid, but that really doesn’t tell you how much the state spends compared to other states. This link: http://www.statehealthfacts.org/comparemaptable.jsp?ind=183&cat=4 shows how much the states spend per person on Medicaid, with separate figures for recipients who are aged, disabled, adults, children and, finally an overall figure. In none of those categories is Vermont the highest or particularly close to being the highest. As for the AHS spending, the web site you sent me to only has… Read more »
Lance Hagen
3 years 10 months ago
Mr. Russ, My statement had to do with the number of people that have come dependent on government services. Your counter seems to focus on how much $ they are receiving for these services. This is an entirely different argument. If I use enrollment in Medicaid as my metric, in 1991, 10.8% of the Vermont population was enrolled. In 2009 that number has increased to 29%. Compare that to the US, which was at 9.9% in 1991 and 20% in 2009. Comparing Vermont’s numbers to the rest of New England, they were at a level of 10.4% in 1991 and… Read more »
Lee Russ
3 years 10 months ago
Mr. Hagen, While the amount of benefits doesn’t directly affect the speed at which the number of recipients is growing, the amount certainly does affect the overall burden to the state, and the sustainability of that burden. There are a lot of statistics in your last post, but only the state expenditure per capita has a supporting link. That figure, of course, is for total state spending, not just human services. Note that most of the states ranked above and near Vermont are also rural, which certainly does tend to drive up spending per capita. The data on Medicaid enrollment… Read more »
Lance Hagen
3 years 10 months ago

After ‘railing’ on me for not providing links to the data I used

You make positions statements, without any supporting data, much less links.

I am getting the feeling that any data or analysis is not of any interest to you.

Lee Russ
3 years 10 months ago

Mr. Hagen, I didn’t “rail on you,” I said I’d be very interested in data. I’ve followup up every link you provided, read the info at the link, and tried to respond reasonably to the data I found there.

I made no “position statements” at all as I understand that term. I stated what I believe (and clearly indicated it was a belief, not a statement of fact) to be the questions that I think need to be answered by all of us.

I’m not sure why you seem to be upset.

Lee Russ
3 years 10 months ago
I think the report blew any semblance of trustworthiness and objectivity with its claim that the slow growth of Vermont’s population was “a key fact acting to constrain the growth in demand for services.” Really? How disingenuous. As others have pointed out, the segment of the population needing help to stay alive has grown considerably thanks to the financial meltdown and decades of extreme (mostly federal) policies on taxes, business and financial regulation, and the desirability of transferring millions and millions of jobs overseas. THAT is what drives the human service budget growth, not the expansion of the total state… Read more »
Scott Mackey
3 years 10 months ago
I agree with the fundamental premise of Mr. Pelham’s argument, which is that spending pressures in Vermont exceed the ability of our economy to pay for them. We’ve been able to paper over this problem with borrowed money from a bankrupt federal government, but this federal largesse must come to an end our else the US economy is going to collapse under the weight of debt. If you look at the trends in revenue collections, there should be cause for concern whether you are a fiscal conservative who agrees with Mr. Pelham or whether you are a liberal who supports… Read more »
3 years 10 months ago
I wish to address RAcine’s remarks re fuel assistance. This is often given out to those who do NOT need it, ie welfare recipients who rent housing with heat included. I am one of those landlords providing not only heat but quality heat. See our website listed above. I just had a tenant quit paying me rent, broke their lease, owe me $1800 plus,just had her second illegitiamte baby on welfare, ie medicaid, and was counting on the extra welfare dollars for the baby starting in springtime. What a racket. Why are folks who have heat included given fuel assistance… Read more »
Lee Russ
3 years 10 months ago

I can’t possibly address the specifics your situation, obviously, but I can say this:

1. If you know of abuse of any public program, by all means report it.

2. I don’t know what fuel assistance program you’re talking about, but the LIHEAP program certainly doesn’t throw money around needlessly; these people desperately need help or they freeze.

3. Are the individuals you describe typical of Vermonters who receive some form of public benefits? I doubt it.

Dave Bellini
3 years 10 months ago
The bulk of the state budget is K-12 Education and Human Services. In Human Services, the cost goes up because the caseloads go up. In Corrections, the cost climbs as the number of offenders climbs. The DOC budget went down slightly last year as the inmate population leveled off. The outlier however is K-12 Education. The trend is less and less students BUT higher and higher spending. That’s just nuts. FOR EXAMPLE: I live in Montpelier, which has seen a dramatic drop in the number of students over the years. The cost continues to soar however. This year it will… Read more »
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